U.S. elected local officials seeking to create and sustain solar industry job growth in their Congressional districts should be aware of and advocate accordingly on a current piece of U.S. trade policy toward China that is in the making — the International Trade Commission (ITC) investigation: Certain Crystalline Silicon Photovoltaic Products from China and Taiwan — which may be highly consequential to solar industry interests at the local level.

Crystalline silicon PV (CSPV) products such as cells are the principal components of solar panels, products which China produces much more of than the U.S. and sells for a lower price than U.S.-based solar power systems producers. While American buyers of such CSPV products imported from China enjoy comparatively low prices, U.S.-based producers of these goods selling at average prices consequently struggle to compete in the same market.

For this very reason, in December, 2013 an American solar power systems producer, SolarWorld, filed a petition to the ITC requesting that anti-dumping and countervailing duties be imposed against CSPV cells and modules imported from China and Taiwan. With this investigation now moving forward and the final decisions by the U.S. Department of Commerce and ITC expected in December 2014 and January 2015 respectively, it is possible that both types of duties may ultimately be imposed, pending external influence such as advocacy against the duties.

U.S. locales with jobs in the solar industry must understand the different economic outcomes associated with whether the duties are imposed or not, and which outcome is more desirable for their locale. In brief, if the duties are imposed, the outcome would favor new growth in solar manufacturing in the U.S., and if the duties are not imposed, the outcome would favor continued growth in solar panel installation jobs in the U.S.

To elaborate, a large volume of American jobs have and continue to be created for the assembly of CSPV cells into solar panels. This large volume of installation jobs is due in part to large quantities of inexpensive CSPV cells from China available for export to American buyers. If the duties are imposed, CSPV products available for import from China would increase in price, reflecting prices that are more on par with other producers such as SolarWorld.

A widening range of U.S. industries and their job markets will be impacted by trade and competition with China.

A benefit of this outcome would be that U.S. manufacturers of CSPV products would have a greater opportunity to earn profit and over time allow solar industry manufacturing in the U.S. to grow, creating solar industry manufacturing jobs that are more sustainable than short-term solar panel installation jobs. Conversely, a cost would be that the absence of low-cost Chinese CSPV imports would result in fewer U.S. purchases of those products, and the otherwise high volume of jobs solar panel installation jobs inside the U.S. would decrease.

If the duties are not imposed, then relatively inexpensive Chinese CSPV products will continue to be available to U.S. buyers as they are now. A benefit of this outcome would be that the relatively high volume of solar panel installation jobs in the U.S. would continue, given the availability of inexpensive Chinese CSPV imports.

A cost, however, would be that solar power systems producers in the U.S. that sell at more standard prices, such as SolarWorld, would continue to struggle to compete for customers. In turn, this outcome would stymy the potential for growth in U.S. solar manufacturing and the jobs that would come with it.

In The Spotlight

Which outcome is more desirable for a given U.S. locale is a matter of what type of solar industry jobs are more amenable to a locale, and which will yield the greatest economic benefit over time. A locale which creates a substantial amount of jobs annually for solar panel installation and is interested in maintaining the availability of these jobs may be against the imposition of the duties. A locale which is home to a solar manufacturing facility or which desires to foster favorable conditions for expanded solar manufacturing jobs may be for the imposition of the duties.

Whichever position on the issue locales choose, U.S. elected local officials and local solar industry representatives alike must advocate their position to Washington. In recent years, civil society mechanisms are emerging in the U.S. to provide effective channels for such local-national advocacy on China-related policy issues.

In 2009, a group of American and Chinese mayors and businesspeople established the U.S.-China Cooperative Association of Elected Local Officials (USCCAELO), initially to boost communication and cooperation between U.S. local elected officials and Chinese counterparts. The relatively frequent presence of U.S. trade and other policy toward China that impacts local economies influenced USCCAELO to provide the additional function of acting as an effective platform for U.S. local elected officials to advocate for or against such policy to Congress.

It is necessary for elected officials of U.S. locales with solar industry jobs to utilize channels such as the USCCAELO to advocate for their interests with respect to the ITC investigation, as well as for local solar industry representatives to encourage their officials to do so, well in advance of the December and January federal decisions. A widening range of U.S. industries and their job markets will be impacted by trade and competition with China over time, prompting corollary trade policy that may impact local economies positively and/or negatively. As this tide rises, so too will the utility of USCCAELO, and the more it is used, the more effective it will be in advocating for the concerns of U.S. locales across industries.

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Benjamin Leffel
About The Author Benjamin Leffel
Benjamin Leffel is Director of Research for the Tai Initiative, a U.S.-China subnational relations capacity building organization, and a Ph.D. student at University of California, Irvine, advancing research on this field.




www.taiinitiative.org


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